Energy and fertilizer sectors set to bounce back in 2017
(SASKATOON) – May 4, 2016
Saskatchewan’s export situation will improve dramatically from this year to next, according to Export Development Canada’s (EDC) semi-annual Global Export Forecast. Continued challenges in the energy and fertilizer sectors will cause the province’s overall exports to shrink by three per cent this year, but growth returns in force in 2017 to the tune of eight per cent, thanks to partial recovery in the energy sector and a strong performance by the agri-food sector.
Once again, Saskatchewan is Canada’s leading province when it comes to agri-food exports. EDC forecasts that the sector, which accounts for nearly half of the province’s exports, will grow by three per cent this year, and six per cent in 2017.
“Saskatchewan’s oil seeds and pulses exports will remain very strong over the next two years due to a lower Canadian dollar, higher prices, and continued demand from emerging markets,” said Peter Hall, EDC’s Chief Economist.
“China and India both have a rapidly-growing middle class with consumers that are hungry for the world-class quality of Saskatchewan’s agri-food products. We’re starting to see the impact of that demand now, but in our view this is only the tip of the iceberg.”
Energy sector exports are expected to grow by 19 per cent in 2017, rebounding from a 17 per cent drop-off this year. Accounting for almost one-quarter of the province’s exports, the energy sector is having a significant negative impact on the province’s overall export forecast in 2016. An about-face in the sector next year will likewise help to drive overall exports back to healthy growth levels.
Similar trends will be seen in the province’s fertilizer sector, which accounts for roughly three-quarters of Canada’s international fertilizer shipments. Saskatchewan’s potash exports will feel the impact of declining prices and global over-supply, declining five per cent this year, but managing three per cent growth in 2017.
“There was no avoiding what happened with energy last year and the further impact that decline is having this year, but better times are on the horizon for Saskatchewan exports,” said Hall. “We think that now is the time for Saskatchewan exporters to plan for and capitalize on global opportunities. Growth is coming, it’s a matter of being well-positioned when it arrives.”
Mr. Hall is discussing Saskatchewan’s export prospects – and those of the rest of Canada – with local business people today at the Radisson Hotel in Saskatoon. The event is being held in partnership with the Saskatchewan Trade & Export Partnership (STEP).
Over the next month, Hall will travel across Canada for EDC’s Let’s Talk Exports tour, which offers insights on the current global economy and explores how economic trends will impact Canadian exporters.
Visit EDC’s Global Export Forecast: Spring 2016 to learn more.
EDC is Canada’s trade finance agency, providing financing and insurance solutions locally and around the world to help Canadian companies of any size respond to international business opportunities. As a profitable Crown corporation that operates on commercial principles, EDC works together with private- and public-sector financial institutions to create greater capacity for Canadian companies to engage in trade and investment.
Some of its services include the Export Guarantee Program to help exporters access more financing, direct financing in support of contracts and direct investment abroad, Foreign Exchange Facility Guarantees to help exporters manage foreign exchange risk, and Political Risk Insurance that can cover up to 90 per cent of losses from political risks in foreign markets.
EDC’s economics team includes some of Canada’s leading trade experts, who share their knowledge freely with Canadian companies looking to grow their international sales and help them manage the associated market risks. Its semi-annual Global Economic Forecast addresses the latest global export conditions, including providing perspectives on leading economic trends and export strategies to help Canadian companies of all sizes maximize their export growth. The forecast also analyzes a range of risks for which exporters should be prepared.
For more information about how EDC can help your company, visit www.edc.ca.
Export Development Canada